Benedict, 42-year-old has regained its position in the sector of the restoration three months after losing it. During this period without employment, it has affected the Delivery of canadian emergency (PKU), but he wonders now how he will pay the tax due on these amounts. It evaluates the possibility of going bankrupt.
In the event of a second wave that would cause him to lose his work again, Benedict is asked how he will be able to meet its financial obligations. In fact, he had already accumulated 8900 $ on a credit card and a personal loan, and was struggling to make ends meet. A second period of unemployment would be a disaster for him, especially if it were to last longer than the first time. It is, therefore, went to seek counsel with the firm of licensed trustees in bankruptcy Jean Fortin & Associés.
“We started by calculating the amount of tax potentially due. Benedict has made use of the ECP for three months or 6000 $. Assuming that he will receive the same salary as before the crisis by the end of the year, he will be affected in total revenue 41 $ 300 for 2020 “, says Pierre Fortin, president of Jean Fortin and Associates.
According to the schedules the tax, his tax rate will be 27 %, or a total of 1620 $ (27 % of $ 6,000) on the PKU, for the two levels of government. If he loses his job, it will be difficult to pay this amount, plus those related to the monthly payments for his personal loan, and his credit card, which amounted to $ 180 and $ 170 per month, respectively.
“Any unpaid tax can, however, be included in a bankruptcy, with the exception of cases of fraud. They could also do in a consumer proposal, if it comes to the tax bill of a previous year or even for the current year, but only to the federal government, ” says Pierre Fortin.
In the context of a bankruptcy, without saying that it would be the best solution in the circumstances, Benedict could also get rid of all his debts of consumption, is 8900 $ plus 1620 tax of$.
If Benedict keeps his job and he is able to repay its debts, it must nevertheless ensure that they put enough money aside to have no bad surprises with the tax bill next spring.
Two possibilities : either it is deposited in a savings account the sum of $ 180 from August 2020 to April 2021, is he requests his employer to deduct more tax from each of his pay. In this case, this is equivalent to 131 $ deductions additional every two weeks by the 31 December next.
“Save yourself a sum of money for a future expenditure is the best option, because it allows you to control your budget. But it is obviously necessary to stick to the game plan until the end “, recommends Pierre Fortin.If Benedict finds himself still without a job it will already have this money in pocket, which would not be the case if these sums have been paid in advance to the tax authorities. “Moreover, if he later files a consumer proposal or go bankrupt, the government will keep the money collected in advance “, says Pierre Fortin.
In any case, Benedict will have to be cautious and develop a good strategy to pay for its debts. Many employers have suffered economically from the containment measures and social distancing. Many have been weakened and it is not certain that they will be able to remain afloat. In such a context of uncertainty, it is best to avoid non-essential spending this year, and focus on the reduction of its debt.
His financial situation
Income : annual Salary : of $47,000
Debt consumer :
Credit card : 3700 $ (monthly payment : 170 $)
Personal loan : 5200 $ (monthly payment : 180 $)
TOTAL : 8900 $
Taxes to be paid on the PCU :
1620 $ (180 $ for 9 months)